BY NKECHI NAECHE- ESEZOBOR— In its aggressive bid to curb inflation, Central Bank of Nigeria (CBN) on Tuesday raised the Monetary Policy Rate (MPR), from 16.5 percent to 17.5 percent, BusinessToday has learnt.
The Central Bank Governor, Godwin Emefiele, announced the development to journalists on Tuesday after the first committee’s meeting in 2023 at the CBN headquarters in Abuja.
It would be recalled that Nigeria’s inflation rate fell slightly from 21.47 percent to 21.34 percent in December 2022.
This is the fifth time the CBN would increase the interest rate despite advice from manufacturers and some key stakeholders.
MPC raised the monetary policy rate by 100 basis point to 17.5% and kept the asymmetric corridor at +100/-700 basis points around the MPR.
The MPC retained Cash Reserve Ratio (CRR) by 32.5% while liquidity ratio is kept at 30%.
He said MPC “members welcome the recent deceleration of the year-on-year headline inflation, noting that the persistence in policy rate hike over the last few meetings of the committee have started to yield the expected decline in inflation.”
He explained further that the committee considered perennial scarcity of Premium Motor Spirit known as petrol, the 2023 general elections, continuous rise in energy prices, exchange rate pressure as well as continuous rise in insecurity
According to him committee members noted that the naira redesign has huge moderating factors to price development on cash.
He added that, “MPC was of the view that although inflation rate moderated marginally in December, the economy remained confronted with the risk of high inflation with adverse consequences on the general standards of living.
“Committee, therefore, decided to sustain the current stance of policy at this point in time to further rein in inflation aggressively.
“MPC voted to raise the MPR to 17.5%, retain the asymmetric at +100/-700 basis points around the corridor.”